Finding the total amount of money: Original deposit =$1000 X Firstbank lending =$800 Secondbank lending =$640 十 Thirdbank lending =$512 other lending. Total money supply =(1/rr)x $1000 wherer ratio of reserves to deposits In our example,rr=0.2,so M=$5000 CHAPTER 18 Money Supply and Money Demand slide 11CHAPTER 18 Money Supply and Money Demand slide 11 Finding the total amount of money: Original deposit = $1000 + Firstbank lending = $ 800 + Secondbank lending = $ 640 + Thirdbank lending = $ 512 + other lending. Total money supply = (1/rr )  $1000 where rr = ratio of reserves to deposits In our example, rr = 0.2, so M = $5000 1